I think people know we're screwed, even if they can't give specifics...and is another reason a certain guy won the top job in this country...people are kinda sick of professional politicians.... and everything they like to borrow and spend.
OT: Mortgage Rates
- Thread starter huskerbaseball13
- Start date
I think people know we're screwed, even if they can't give specifics...and is another reason a certain guy won the top job in this country...people are kinda sick of professional politicians.... and everything they like to borrow and spend.
The number includes government spending and fed money printing purchases in aggregate. If you think that 2 trillion stimulus is all that will happen you're in extreme denial at the depth of our debt issues.
But reasosn... here's a few.
Foreign investors not renewing their treasury purchases for various reasons requiring more direct purchases to pick up the slack. I'm figuring we will have to buy 15 trillion of our floating debt (up from about 4 in 2008)
Massive stimulus. There will be a car buying program and a Boeing stimulus among others.
A lot of very large companies have ran up debt to buy stock. They will require bailouts or we will have worse unemployment.
I missed a few. Doesnt matter.. if you havent gotten the hint yet welll...
Totally fair.
To be honest I like the idea of making choices free of past burdens. We will need someone capable of that soon enough.
I posted this on the other thread but this can be the salvation or a big part of for this country during this time. I am reposting here to make more see it this can really help some families
Seriously people anyone on here who has been laid off or affected economically call your bank or go online and check your lenders - especially for Auto or home loans.
Here is an article what Bank of America is doing - virtually most or all will be doing the same - https://www.cnbc.com/2020/03/27/ban...customers-can-defer-loan-payments-online.html
This is a deferral not a modification you do not need to be behind and it will not adversely affect your credit and credit reports. You are simply moving your payment to the end of the term. Yes there will be additional interest ( not much really) but if you can defer your house and car payments for a couple of months is that such a bad thing. If they do not have the information on their website call them
Seriously people anyone on here who has been laid off or affected economically call your bank or go online and check your lenders - especially for Auto or home loans.
Here is an article what Bank of America is doing - virtually most or all will be doing the same - https://www.cnbc.com/2020/03/27/ban...customers-can-defer-loan-payments-online.html
This is a deferral not a modification you do not need to be behind and it will not adversely affect your credit and credit reports. You are simply moving your payment to the end of the term. Yes there will be additional interest ( not much really) but if you can defer your house and car payments for a couple of months is that such a bad thing. If they do not have the information on their website call them
It's the same thing students do occasionally with their student loan debt. I think my wife had to do it 4 times. Now we are on the downhill stretch with hers.... finally.
It's helpful in bad times.
It's helpful in bad times.
The mortgages are mostly owned by Fannie and Freddie which obviously is owned by the government - they are working on guidance for the servicers on this as it is a little more complicated but imo it will happen fairly quickly but call your auto loans now. Servicer means that even though pay a bank on your mortgage they do not own that mortgage they just service it
I've been renting in small town Nebraska (30 minutes from Omaha) cause its half price of owning a home in Omaha. Lately, I've been thinking of buying a home but the prices in Omaha are CRAZY!
A 3 bedroom, 2 bath (that doesn't need renovations) that is in a good neighborhood in Omaha will run you 185K - 210K. That is nuts.
I will just continue to rent and pay my grand a month for the same house.
A 3 bedroom, 2 bath (that doesn't need renovations) that is in a good neighborhood in Omaha will run you 185K - 210K. That is nuts.
I will just continue to rent and pay my grand a month for the same house.
I agree it could well cost more than $2 trillion. I'm just curious where you got a number that is 1.5 times US GDP, and roughly 1/3 of global GDP. It doesn't seem reasonable to me, and the items you mentioned don't seem like they would add up to $30 trillion. The entire corporate bond market isn't even $10 trillion (and the government obviously wouldn't need to buy all of it anyways, it would most likely buy bonds in the high yield market, which is around $1 trillion in size).
Maybe you read the $30 trillion figure somewhere, just curious, that's all.
Nope, came from me with knowledge of the situation and an ounce of common sense. The situation is bigger than last time significantly.
Call it a reasonably educated guess although I can provide sources to an extent to back up my reasons.
Not that it takes much. Hell everyone knows the larger companies were borrowing huge amounts to buy back stock. Low interest? Why not?!?!?
Well... here's why not. Bailout time! Never mind that the mechanism is essentially a way for corporate insiders to strip the assets from a company.
As for say... the dollar carry trade I reference hedge funds have been borrowing euros or yen to buy dollars. Negative interest for positive with extreme leverage. Nope... that will never blow up with dollar implications. And thus need bailed out.
I just study this stuff. Extensively.
Not sure about 30 trillion but the Fed balance sheet topped 5 trillion for the first time in history. This is not stimulus money it is assets bought by the Fed to prop up bond and mortgage markets
https://www.reuters.com/article/us-...gn=Feed:+reuters/businessNews+(Business+News)
The stimulus is a specific bill. The fed is the shadow behind "funding" it all.
lol - Hearing about home prices back in NE is crazy. $210k doesn't buy you anything in Mass. Even most land is crazy expensive. I'm not even talking Boston, I'm talking north, south, east west of. I live right on the NH border and your looking 350k+ for a 3/2, and most need some updating/work. And even worse is most were built early 1900's or earlier
It's crazy if you make south of 75K which is most people, but I agree with you. 100%
That's what I referring to... the 30 trillion includes both the "asset purchases" (a euphemism for money printing) plus the stimulus. We've already got over a trillion in purchases and 2 trillion coming with the first of many stimuli.
It's a complete con. The media says the smaller number if you're lucky and ignores the real number and couches it as "asset purchases" which assumes you actually have assets to purchase with so people dont get spooked.
Plus the media is economically ignorant and bought by special or corporate interests to be extremely kind.
It's a complete con. The media says the smaller number if you're lucky and ignores the real number and couches it as "asset purchases" which assumes you actually have assets to purchase with so people dont get spooked.
Plus the media is economically ignorant and bought by special or corporate interests to be extremely kind.
Where I live you'd triple that to 600k to get a fixer up, and I'm nowhere near a coast.
At current rates, a 160k loan (200k purchase price - 20% down payment) @ 3.5% will cost you $718. Add property taxes and insurance, which are variable...are you really looking at something so much more than $1000/month to buy?
well they are buying assets and because they buy so much of it they manipulate the market ( the whole point) however in the end it would not surprise me if there was money made on it
That would require selling them which they have already proven to be unable to do.
Nope. Straight printing.
Why arent they able to do it?
.... to circle back around...
Because interest rates would skyrocket and kill the economy, the housing market, and pretty much a lot more.
.... to circle back around...
Because interest rates would skyrocket and kill the economy, the housing market, and pretty much a lot more.
And replaced by more. I mentioned that regarding foreign debt and that they are going to stop rolling it over because they've got their own problems.
f you're just creating more debt ... then as a practical matter they just buy the new stuff to replace it so there's no interest rate spike.
Long term, I agree. You can't add this much "stimulus" err dilution to the money supply and not expect inflation, so home values have to go up in nominal dollars eventually, however before every hyperinflation, there is usually a deflation first, to shake out all the weak hands. How long that period would be, hard to tell and difficult to time.
The other major issue is that the repo market has been buying up MBS as well as other derivatives for 6 months or more, and my understanding is this includes derivatives from foreign banks, putting the US taxpayer, or really anyone holding US dollars, on the hook as they try to protect the current financial system.
There is basically no yield, and everyone is looking for it.. so you end up with a system where you have to take interest rates negative.
So much wrong in this thread....rates will go lower and the Fed buying MBS is bankrupting Mtg Cos in short hedge position. Watch the next 90 days.
Been in Mortgages for 20+ yr at one of the top 5 in the Country. Q4 and Q1& 2 of next year will have record rates.
Been in Mortgages for 20+ yr at one of the top 5 in the Country. Q4 and Q1& 2 of next year will have record rates.
Depends on your situation....generally speaking, if you are cash flush...and I don't mean 20k in the Bank....the WORST thing you can do it accelerate your Mortgage. Only an idiot eliminates cash borrowed at 3.5% when they could be making 10%+. Simple leveraging.
I know..:I know...I don't want a house payment when I retire! Great, buy your house for 50 cents dollar with a Reverse Mortgage( I can't wait for the wisdom to come on this)
The key is to have the ABILITY to pay the mortgage. If I owe 300k and I have 300k cash, the last thing I do is pay my mortgage. I'd think people learned from 07-2012 that the LAST thing you want in periods of unemployment is a bunch of equity. You get behind the bank takes it and gets the equity. You're fully levered? Bank says what can we do to keep you in your house.
Anyone bragging about equity in their house is laughed at behind the scenes. It's simply air that you can't touch, spend or anying else....and....when you need it...values have dropped or you can't qualify.
Strange that whomever wrote that article didn't mention Margin Calls once
Why would anyone in the media have a clue about market mechanics...
Deferrals will implode the system. You know ZERO on what that will do. Jesus.
Loan Servicer that service GOVT loan have UNLIMITED liability to MBS holders, meaning...you don't pay the Servicer BUT the Servicer still has to pay. Think Servicer are going to take loan with that out there? Guess what happens if we can't sell off Servicing Rights.
People....
If you want a remedial knowledge of what's happening...google:
Mortgage Company Margin Calls and Fannie Mae Cash Window Pricing
I CAN tell you that an OCEAN of money is being made by some....and an OCEAN is being lost by others. You'll see many Mtg Cos go tits up soon with no cash position.
Those that survive the next 6 months? The LOs, GOOD Branch Managers and Companies will make legendary money....and it's already "are you f'n kidding me" money...for some....many others are already out of business and just haven't close the doors.
Mortgage Company Margin Calls and Fannie Mae Cash Window Pricing
I CAN tell you that an OCEAN of money is being made by some....and an OCEAN is being lost by others. You'll see many Mtg Cos go tits up soon with no cash position.
Those that survive the next 6 months? The LOs, GOOD Branch Managers and Companies will make legendary money....and it's already "are you f'n kidding me" money...for some....many others are already out of business and just haven't close the doors.
that 185-200k is perceived as expensive just reminds me how insane the West Coast real estate market is
Btw i agree with you rates lower for 90 days... after that who knows. I just have issues with the long term viability. People don't see the interplays in the markets unless you've traded them for real money.
And the bond markets specifically are beyond them.
I'm waiting to refi most of my debt. Poised and waiting. Don't need perfect rates but I'm going to improve it greatly.
I get it. I just don't see how the fed can hold things together. Given the digital dollar push I'm not sure they are even going to come close.
If you can, live as much below your means as you can stand or are able, as early in life as possible. Invest the difference. When investments grow to the point you can buy your house outright and have a good cushion too, then you can choose to do so if you want. People that argue that you must maintain leverage at that point most likely are either trying to sell you something, or have never been in that situation themselves. Of course, you can choose to maintain leverage if you want. But also nothing wrong with having home base covered and continuing to grow from there.
https://www.marketwatch.com/story/f...omeowners-facing-financial-trouble-2020-03-27
Looks like they are going to do deferrals however mortgage has to be past due or going past due
Rates will be up in the short term to stave off more Margin Calls. Mtg Cos HAVE to clear pipelines before the Fed buys MBS or its complete implosion. 6-10 months and rates crater once economic effect is baked in.
LOL that's so cheap.
Mortgage on $210K is $1255 a month with zero down.
You're saving $255 a month in rent to live 30 minutes farther from everything.
You probably spend more than that on gas.
Buy the house. Build equity.